The China Global Investment Tracker follows large Chinese investments around the world. The leading recipient of these investments is the US, which received $175 billion between January 2005 and June 2018. However, Chinese investment in the US has plunged since its 2016 peak.

The Turkish lira dropped dramatically against the dollar Friday, losing more than 18 percent of its value in one day — worsening an already months-long decline for Turkey’s currency. What caused this steep drop in the price of the lira? There are multiple factors, many of which are related to the economic policies of Turkey’s leader, Recep Tayyip Erdogan. - Washington Post

Editorial: Like King Lear raging on the heath, Turkey’s Recep Tayyan Erdogan is lashing out at Donald Trump, financial markets, the almighty U.S. dollar and anyone else he can find to assign blame for his country’s currency and debt crisis. Someone should introduce him to economist Steve Hanke, who is offering the Turkish strongman the best lifeline available to stop the panic. - Wall Street Journal

Ishaan Tharoor writes: On Friday, the Turkish lira suffered its biggest one-day devaluation in nearly two decades, dropping more than 14 percent against the dollar. The minister of finance — the son-in-law of Turkish President Recep Tayyip Erdogan — couldn’t avert the slide, delivering a halting speech that did little to boost confidence. But Erdogan, as he so often does, placed the blame on a foreign scapegoat: the United States. - Washington Post

Desmond Lachman writes: Among the more important lessons that can be learned from the ever-deepening Turkish economic and financial market crisis is that years of ultra easy monetary policies by the world’s major central banks can have serious adverse consequences. - American Enterprise Institute
​
Desmond Lachman writes: One has to wonder what it will take for Erdogan, Turkey’s president, to recognize that his country has a major investor confidence problem that needs to be addressed immediately if his country is not to succumb to the deepest of economic recessions. One also has to wonder how long it will take him to realize that his country has little realistic option but to approach the IMF for assistance to restore investor confidence. - American Enterprise Institute

Turkey steps up efforts to shun dollar As the Turkish lira plunges to a record low, some voices in Ankara are warning that the United States is furious over Turkey’s efforts to reduce its dependency on the dollar.

The coming battle for IdlibSyrian regime forces are deploying near and around Idlib province, in northwestern Syria, suggesting that the battle for Idlib is shaping up despite diplomatic gesturing and a statement by Russia denying an imminent operation.

Turkish lira slumps further as US reports no real progress on BrunsonThe lira slumped again on Wednesday after a American and Turkish negotiators failed to come to a deal over the detention of an American pastor that has resulted in US sanctions against Ankara. The lira fell 4% against the dollar, hiking up losses this year to nearly 30%, after a Turkish delegation led by Deputy Foreign Minister Sedat Onalfailed to get the Donald Trumpadministration to ease pressure on Halkbank, which could face a major US fine for allegedly evading Iran sanctions. The State Department reportedly refused to discuss the issue without a deal to release US pastor Andrew Brunson, who Turkish authorities moved to house arrest last month. “That’s the real progress that we’re looking for, and obviously we’re not there yet,” State Department spokeswoman Heather Nauert said.Read More​

Doomed US trade policy Desmond Lachman | Official Monetary and Financial Institutions Forum President Trump’s trade policy suffers from the most basic of contradictions that doom it to failure. Trump wants to impose increased import restrictions on trade partners to help eliminate the US trade deficit. Yet, this administration is following policies that will increase the US budget deficit and will have the unintended consequence of strengthening the dollar. That combination is certain to cause the US trade deficit to widen rather than narrow.

Jeff Moon writes: An overlooked irony of the American trade dispute with China is that Donald Trump is the first U.S. president to fight back using Chinese tactics. This time, it’s the Chinese officials who are frustrated over the lack of clarity in demands, the sudden changes in negotiating positions, and the unpredictable escalation of tensions. - Wall Street Journal

Trump’s proposed new tariffs on $200 billion of imported goods from China escalate the U.S.-China trade conflict and intensify the debate about the economic and political implications of trade negotiations. Clearly, the tariffs will be costly to some U.S. industries, but they also put China in a bind. Also, markets are speculating that China may devalue its currency as a retaliatory measure. These issues are more complex on many dimensions than they seem on the surface. Read more here....

China’s currency depreciation should set off alarm bellsDesmond Lachman | The Hill The recent Chinese currency depreciation should be cause for concern for the global economy. Not only does that movement likely presage further currency depreciation in China, the world’s second-largest economy, but it also increases the likelihood that China and the United States might be drifting inexorably toward both a currency and a trade war.

Does The Flat Yield Curve Point To A Looming Recession?quoting Raghuram Rajan via Bloomberg QuintIs the flattening yield curve in the U.S. bond market sending signals of a looming recession? That’s still not clear, Former RBI Governor Raghuram Rajan wrote in the Financial Times. The difference or the spread between the yield on two-year Treasury bills and 10-year benchmark bond is narrowing. It “has compressed to less than 40 basis points, he wrote.

China's retaliation to Trump's tariffsIt did not take long for the Chinese government to retaliate against the Trump administration’s latest Section 301 tariff announcement. Shortly after the US Trade Representative’s office released its revised lists of Section 301 tariffs on $46.3 billion of targeted Chinese products on June 15,...

Italy's Quadruple Threat To Europeby Michael J. Boskin via Project SyndicateItaly's new Five Star Movement/League government has been assuring financial markets that its intentions with respect to the euro and EU fiscal rules are pure. But soothing words will not change the fact that Italy is beset by political and economic crises that could plunge it – and Europe – into the abyss.

Our tariffs are biggerDerek Scissors | AEIdeas China made a major mistake when it pledged to mirror the initial 25 percent US tariffs on $50 billion of their exports. It did this for the first time in early April and provoked an immediate American vow to go to $150 billion in Chinese goods subject to tariffs. Doing so again was therefore a direct challenge to President Trump’s credibility. This potential “trade war” was started by an inquiry into Chinese theft of and coercion with regard to intellectual property (IP). The best American response is to target Chinese firms that have used stolen or coerced IP to become unfairly competitive.